'Systems' Study Gave Insights

Over the past few years the U.S. Geological Survey
spent 100 man-years studying the topic of the world's future energy
supplies, and then two years ago issued a new global assessment
of the undiscovered conventional oil and gas resources and potential
additions to reserves from field growth.

The numbers from the study are important — but the
research also led to some surprising geologic insights that could
help explorationists uncover new reserves around the globe.

"We studied all the significant petroleum systems
of the world," said Thomas S. Ahlbrandt, world energy project chief
for the USGS in Denver. "We looked at 128 assessed provinces and
identified 149 total petroleum systems, which include undiscovered
resources. Then we further subdivided those systems into 246 assessment
units, or more homogeneous entities within the petroleum system."

The assessment process coupled geologic analysis
with a probabilistic methodology to estimate remaining potential.
For these provinces, the endowment of recoverable oil, which includes
cumulative production, remaining reserves, reserve growth and undiscovered
resources, is estimated at about three trillion barrels of oil.
The natural gas endowment is estimated at 2.6 trillion barrels of
oil equivalent.

Oil reserves are currently 1.1 trillion barrels of
oil, with world consumption of about .028 trillion barrels per year.
Natural gas reserves are about .8 trillion barrels of oil equivalent
and world consumption is around .014 trillion barrels of oil equivalent.

So without any additional discoveries of oil, gas
or natural gas liquids, the world has about two trillion barrels
of oil equivalent of proved petroleum reserves, according to the
study.

With additional reserve additions from undiscovered
resources — or potential addition due to reserve growth — there
is a total oil and gas endowment of about 5.6 trillion barrels of
oil equivalent. The USGS estimates that the world has consumed about
one trillion barrels of oil equivalent of this endowment, or 18
percent, leaving about 82 percent of the endowment to be used or
found. Half of the world's undiscovered oil and gas potential is
offshore, the study indicates — and Arctic basins, with about 25
percent of undiscovered petroleum resources, make up the next great
frontier.

"From a geologic perspective, this study was a unique
opportunity to look at petroleum systems throughout the world —
and to our surprise we found that we have much to learn about these
systems," Ahlbrandt said. "The resource volume data we compiled
is important, but just as critical is the geologic knowledge we
gleaned from the study."

Over the past few years the U.S. Geological Survey
spent 100 man-years studying the topic of the world's future energy
supplies, and then two years ago issued a new global assessment
of the undiscovered conventional oil and gas resources and potential
additions to reserves from field growth.

The numbers from the study are important — but the
research also led to some surprising geologic insights that could
help explorationists uncover new reserves around the globe.

"We studied all the significant petroleum systems
of the world," said Thomas S. Ahlbrandt, world energy project chief
for the USGS in Denver. "We looked at 128 assessed provinces and
identified 149 total petroleum systems, which include undiscovered
resources. Then we further subdivided those systems into 246 assessment
units, or more homogeneous entities within the petroleum system."

The assessment process coupled geologic analysis
with a probabilistic methodology to estimate remaining potential.
For these provinces, the endowment of recoverable oil, which includes
cumulative production, remaining reserves, reserve growth and undiscovered
resources, is estimated at about three trillion barrels of oil.
The natural gas endowment is estimated at 2.6 trillion barrels of
oil equivalent.

Oil reserves are currently 1.1 trillion barrels of
oil, with world consumption of about .028 trillion barrels per year.
Natural gas reserves are about .8 trillion barrels of oil equivalent
and world consumption is around .014 trillion barrels of oil equivalent.

So without any additional discoveries of oil, gas
or natural gas liquids, the world has about two trillion barrels
of oil equivalent of proved petroleum reserves, according to the
study.

With additional reserve additions from undiscovered
resources — or potential addition due to reserve growth — there
is a total oil and gas endowment of about 5.6 trillion barrels of
oil equivalent. The USGS estimates that the world has consumed about
one trillion barrels of oil equivalent of this endowment, or 18
percent, leaving about 82 percent of the endowment to be used or
found. Half of the world's undiscovered oil and gas potential is
offshore, the study indicates — and Arctic basins, with about 25
percent of undiscovered petroleum resources, make up the next great
frontier.

"From a geologic perspective, this study was a unique
opportunity to look at petroleum systems throughout the world —
and to our surprise we found that we have much to learn about these
systems," Ahlbrandt said. "The resource volume data we compiled
is important, but just as critical is the geologic knowledge we
gleaned from the study."

"From that work we prioritized, 10 of the most important
geologic insights related to the elements of the total petroleum
systems," Ahlbrandt said.

"I used to think I knew a lot about petroleum systems,"
he continued. "I have worked 20 years in exploration and another
20 with the USGS, but I think I have a less clear understanding
now than I did when I started.

"We have much left to learn about petroleum systems,
he said, "and how they work."

Lessons Learned

Here's what the USGS scientists learned.

➤ While
petroleum is trapped in many ways, less than half of the known petroleum
in the world occurs in exclusively structural traps.

"When we looked at the mean resource by trap style
we broke it down by stratigraphic, paleogeomorphic, combination
structural and stratigraphic, compressional, extensional and non-tectonic
structures," said Ahlbrandt, a 2002-2003 AAPG Distinguished Lecturer.

"Compressional structures were the largest category
in terms of numbers — but we looked at the various trap styles
in terms of resource volumes and came to the interesting conclusion
that although many people look for structural traps, there are significant
resources in other trap styles.

"For a recent conference in China, Michel T. Halbouty
made the point that in China — and I think it's relevant for the
world — that the search for the subtle trap will play an increasing
role in world exploration," he said.

Some of the biggest fields in the world — like in
the Sirte Basin in Libya — are combination stratigraphic and structural
traps, and "those kinds of plays will be more important in the future,"
he said.

The advent of high-resolution geophysics expands
the petroleum industry's capability to search for these non-structural
traps, which has been significant in the explosion of this technology,
he said.

Ahlbrandt said that a considerable amount of literature
indicates Type I and Type III source rocks are important contributors.

"However, when we looked at the petroleum systems
around the world we soon realized that volumetrically for both discovered
and undiscovered resources, Type II kerogens, or marine kerogens,
are at least 10 times more significant than any other source rock,"
he said.

"We didn't fully appreciate that until we did this
study," Ahlbrandt added. "This affects your thinking in terms of
where you explore and what types of source rocks to look for.

"Lacustrine and coal source rocks are important where
they are present," he said, "but the world 's petroleum source rocks
are dominated by Type II source rocks."

➤ Source
rocks are found throughout the sedimentary rock record since Pre-Cambrian
time, but Mesozoic source rocks, particularly Jurassic to Cretaceous,
are the most important volumetrically.

"When you look at petroleum volumes associated with
Mesozoic source rocks, especially the Jurassic and Cretaceous, they
are at least four times larger than Paleozoic source rocks and about
five times larger than Cenozoic source rocks," Ahlbrandt said. "When
we actually looked at volumes associated with these source rocks
it was startling to us to see how dominant these Mesozoic source
rocks really were."

➤ Young
Cenozoic petroleum systems are volumetrically dominant, and much
petroleum has clearly been lost from older petroleum systems.

Based on this research, the ideal petroleum system
has Jurassic or Cretaceous source rocks that reach the window of
maturity in the Cenozoic, Ahlbrandt said.

"These are relatively young rocks in the rock record,
so with the dominance of these very young petroleum systems it becomes
clear that a great deal of petroleum has been generated and lost
into the atmosphere or to the surface through time," he said. "Obviously,
there were petroleum systems earlier in the rock record, but they
were destroyed.

"The fate of petroleum is to escape to the surface,
and it's apparent that has happened over the ages."

Researchers could see there are petroleum systems
that are currently active and others that are in various stages
of destruction.

"In many areas of the world we could identify the
fields, but the kitchen may have been destroyed," Ahlbrandt continued.
"The critical element for the preservation of an old petroleum system
is a quality evaporitic seal, like salt. You see this phenomenon
in the Triassic salts of Algeria and the Cambrian salts in the Arabian
Gulf where older petroleum systems are quite prolific."

➤ Critical
elements of petroleum systems are cyclic and concentrated near era
boundaries.

"This statement diminishes the significance of what
it represents — the concentration of good seals, source rocks and
reservoirs near era boundaries suggests there is a possible mega-cyclic
control on petroleum systems," Ahlbrandt said.

The rapidly changing conditions at era boundaries
or significant regional unconformities account for this concentration.

"For example, often there is secondary porosity development
along unconformities," he continued. "In the Middle East there is
excellent porosity development in the Arab Formation, sealing salts
and anhydrites above the reservoirs and adjacent source rocks near
major unconformities. Times of stress and tectonic change in the
geologic record were times of high productivity of source rocks
and elements crucial to the formation of hydrocarbon accumulations."

➤ Despite
enormous recent success in deepwater reservoirs, volumetrically
they are currently the least significant of those considered; continental
reservoirs were dominant.

To learn this, the USGS team first divided reservoir
rocks of the world into continental, continental paralic, paralic,
paralic-shallow marine, shallow marine and deep marine.

"When you look at all of those depositional environments
volumetrically, on average the deep marine is the least significant,"
Ahlbrandt said. "The most important were continental deposits like
alluvial, aeolian and lacustrian depositional settings. Almost universally
people have been surprised by that fact."

Of course, Ahlbrandt said, much exploration is currently
dedicated to deepwater deposits, so their importance will grow significantly
in the future. Deepwater marine deposits have an advantage in that
Type II kerogens are available to source the reservoirs — they
are just under-developed to date.

"While deepwater marine deposits are getting the
lion's share of attention today, it should be remembered there are
other types of reservoirs out there that are very prolific," he
said. "Continental deposits particularly should not be overlooked,
because they have certainly proven their worth many times over."

➤ Future
discoveries will be dominantly from clastic reservoirs.

"For the undiscovered volumes by lithology, we had
about 1.1 trillion barrels for clastics, and about 300 billion (barrels)
for undiscovered carbonate reservoirs," Ahlbrandt said. "The discovered
volumes are a little more equitable, with carbonates being a little
more than half of the discovered clastics. However, for the future,
clastic reservoirs are estimated to be roughly three to four times
more volumetrically significant than carbonate reservoirs."

For example, recent giant discoveries all along the
South Atlantic margin offshore West Africa and the eastern coast
of South America are clastic reservoirs. The large new finds in
the South Caspian Sea also were found in clastics. Even the Middle
East region, sediments above the Jurassic have significant clastic
sequences, such as Cretaceous deltaic reservoirs at Bergan (world's
second largest field).

➤ Salt
is a very effective long-term seal, and salt seals are a critical
preservational component of older Paleozoic petroleum systems.

"If you look at the percentage of discovered and
undiscovered petroleum volumes in the Cenozoic, for example, between
20 and 30 percent of the seals are evaporites," Ahlbrandt said.
"If you go to Paleozoic or Paleozoic and Mesozoic combined, between
50 and 70 percent of the significant seals are evaporites. So, it's
easy to see how concentrated the importance of salts are in older
rocks to preserve hydrocarbons.

"The importance of salt as a seal has been recognized,"
he added, "but when you start looking at relative volumes and concentration
it becomes evident that salt is critical to older petroleum systems."

➤ Most
of the world's petroleum systems are dominated by vertical migration
or limited lateral migration of less than 20 kilometers from the
mature source rock area.

"I wouldn't have made that statement when we started
this study — this was a very surprising finding for us," Ahlbrandt
said. "When we went through our various petroleum system assessments
we expected to see significant long-range lateral migration, but
it wasn't as common as we thought it would be."

About 80 percent of the hydrocarbon resources are
relatively local in proximity to the source rock, the study showed.
As a result, identifying the source rock is a particularly important
component of the exploration process.

➤ Many major conventional natural gas systems are closely linked to
large unconventional or continuous resources.

U.S. companies and organizations have pioneered much
work in unconventional resources like basin-centered gas, coalbed
methane and gas hydrates, but the study team attempted to identify
where unconventional or continuous resources occur in the world.

Ahlbrandt said that effort led to an interesting
and almost predictive observation that wherever the scientists found
large conventional gas accumulations they found indicators of much
larger unconventional basin-centered gas type accumulations.